Solutions to the Top Ebook Production ChallengesGet expert answers to the most common questions facing ebook designers and developers today—from typography and source files to digital workflows. Just enter your email!

Ebook Piracy: How Do You Persuade People to Pay?

In this article, I take a first cut at a taxonomy of “value propositions for the purchase of digital goods” – that is, reasons you should spend money on digital files that you can get for free – and of the market strategies that enhance or undermine each strategy.

Positing 7 value propositions, ranging from “Buy this or you’ll get in trouble” to “Buy this and you’ll get more features than you would with the unauthorized version,” Doctorow’s taxonomy holds the promise of parsing out the discussion into more manageable statements about value. In an industry where the question is usually framed as “How do you stop piracy?” recasting the question as “How do you encourage legal purchases?” might be the solution, one that holds promise for many of the issues of this week’s roundup.

Will Publishers Find Sustainable Ebook Pricing?

Because really, the disconnect in pricing has a lot to do with perceived value, and it’s a disconnect being played in many arenas, but perhaps most noticeably at Amazon. At The Wall Street Journal tech blog, Jeffrey A. Trachtenberg brings in the example of John Locke, a self-published author that sells his books for 99 cents. According to Locke, the burden of proof regarding value falls not on him, but on the traditional publisher.

From the article:

“When I saw that highly successful authors were charging $9.99 for an e-book, I thought that if I can make a profit at 99 cents, I no longer have to prove I’m as good as them,” says Mr. Locke. “Rather, they have to prove they are ten times better than me.”

But, Mike Shatzkin at The Idea Logical Company brings up a great point about “what we know and how.” Even though discussion about ebook pricing has infiltrated mainstream media in force, there’s still a problem of scale. Talking about the pricing of individual authors like Locke is “anecdotal”; what publishers need to do is really experiment with pricing:

[P]ublishers don’t know nearly as much as they could and should about how price affects unit sales and total revenues.

Sooner or later, a big publisher or two will start seriously experimenting with this. They will gain knowledge that will enable them to tell an author or agent, “we know things about pricing that are worth real revenue to you if you publish with us.” When that happens, it will likely be more significant to an author than an increase in the ebook royalty rate would be. Maybe a publisher can even add enough value with pricing savvy to pay for their cut!

But, What About the Value of Books in General?

As if questions about value and ebooks were not enough, two stories about the value of print books caught my eye this week. The first involves Amazon’s $23,698,655.93 book about flies, a story shared by Michael Eisen, evolutionary biologist at UC Berkeley, who just wanted to acquire an extra copy of the out-of-print reference on fruit flies for his lab:

As I amusedly watched the price rise every day, I learned that Amazon retailers are increasingly using algorithmic pricing (something Amazon itself does on a large scale), with a number of companies offering pricing algorithms/services to retailers. Both profnath and bordeebook were clearly using automatic pricing – employing algorithms that didn’t have a built-in sanity check on the prices they produced. But the two retailers were clearly employing different strategies.

Showing in detail how he could determine the underlying strategies of the two retailers based on their automatic pricing behaviors, Eisen’s post is a fascinating look at how the resale market, or at least, the Amazon Marketplace, operates.

The apex of the price war over The Making of a Fly, however, far exceeded the estimated value of this 500-year-old copy of the Nuremberg Chronicle found in Utah. Missing pages and in poor condition, this copy might be valued as low as $50,000, but even one in good condition would “only” be worth up to $1 million. It turns out that “The rarity of the book has almost nothing to do with its value,” according to an antiquities and rare book dealer.

How does this relate to ebook pricing? Considering the ongoing discussion that an ebook purchase is not a sale of an object, but the granting of a license, the value of this 500-year old book highlights ambiguities about how we value books in general. Now that authors can autograph e-books on the Nook Color, what will the value of a personally autographed ebook be, especially since it can’t be resold?

How Can We Connect With Our Readers?

The topic of our last roundtable, “Direct to Reader: Best Practices for Publishers,” is very much part of an ongoing discussion in the book world about the apparent disconnect between the publisher and the reader. It seems an endemic problem for the industry, one that touches on so many other issues, including ebook pricing and piracy, author recruitment, and more.

In Germany, the Leipzig Book Fair is known for being especially reader-friendly; it’s a wonderful environment for authors to connect with the public. But walking around the 2011 fair last month, I couldn’t help thinking that for publishers it was a massive missed opportunity to educate their audience, both at the seminars and in the stands. And that that missed opportunity represents a failure endemic in the industry, in Germany as well as in the United States.

Right now, we do a lot to inform ourselves about changes in the field, and we try really hard to market books to the public. What we do not do is make non-marketing efforts to inform the public about how publishing works and how it is changing.

However, it does seem that some publishing professionals see the writing on the wall, and this week several major players in the industry launched major initiatives designed to establish better connections with the audience.

The first, Penguin’s decision to launch Book County, an online community to support genre fiction writers, seems to acknowledge 2 basic principles about the current book market: first, that more and more readers are becoming authors themselves through self-publishing (and many are commercially viable) and second, that genre fiction, and the communities gathered around them, are especially vibrant areas of the industry.

That these communities should be cultivated was also on Macmillan’s mind this week, as it launched CriminalElement.com, to serve the crime book genre in a “publisher neutral” way, much like its sister communities, Tor.com and HeroesandHeartbreakers.com. Earlier this month, Hachette USA’s science fiction and fantasy imprint launched Orbit Short Fiction to get closer to its readers, and this week, too, F+W Media joined in the genre fiction market with the launch of F+W Crime.

In addition to community building done at the level of genres and imprints, niche markets too offer the chance of a more intimate relationship with the consumer. Take, for example, UK-based Gallic Books, which offers contemporary English-language books translated from French. In a companion piece at Publishing Perspectives, Edward Nawotka poses:

Certainly by developing an expertise in a particular market segment, publisher can exploit this to attract the best authors. In addition, by being so focused, they can hone their marketing programs to precision — something that is often lacking an publishing — and thereby develop a deeper relationship with an audience, a brand even, which can help them sustain sales in the long-term. In addition, several niches are simply too small for the large trade conglomerates to pay much attention to, thus leaving room for smaller publishers to take up the slack and thereby granting them an organic competitive advantage.

Is There Really Such a Thing as “Just Marketing” Anymore?

Finally, three links to affairs outside of the book industry, but with a great deal of resonance for book publishers. One of the complaints often heard about publishers’ inability to connect with readers is that whatever outreach they do is “just marketing.” But perhaps that’s an archaic view of marketing, downplaying the very real connections that marketers are forging between consumers and the brands they represent.

For example, video game producer Valve just launched a highly anticipated sequel to the first-person physics shooter (and personal favorite), Portal. For the release of Portal 2, in addition to colorful YouTube video extras, not-so-secret updates to the original title, and an alternate reality game that started back in March 2010. there was also “cross-promotional bundling” through Valve’s Steam distribution platform, that Chris Meadows at TeleRead links to the book publishing industry’s e-piracy woes.

Of course, the popularity of the Portal games is also heightened by its darkly humorous story world and how it is developed both within and outside of the game itself. The importance of story in branding extends into product marketing, too, as Sarah Doody at UX Magazine explains “Why We Need Storytellers at the Heart of Product Development”:

The first goal of a product storyteller is to facilitate collaboration and co-creation. Today, many companies have their product and marketing groups disconnected from each other. Marketing decisions are often made at the executive level—much higher than where product decisions are made. The result is that marketing tells one story, and the product tells a different story. In the end, consumers are left to put together the conflicting messages and try to determine why they should engage with the product. A product storyteller should be positioned in the company to help break down the walls between all groups, facilitate the development of a single story, foster collaboration between groups, and ensure that every interaction a consumer has with a product or brand maps back to that story.

A third look at the marketing world comes to us from Coca-Cola’s Executive Vice President and Chief Marketing and Commercial Officer Joe Tripodi, writing at the Harvard Business Review blog. Describing concrete ways to look at “consumer expressions” (consumer responses to marketing initiatives) in addition to “consumer impressions” (the number of consumers that encounter an initiative, Tripodi lays out the numbers:

We estimate on YouTube there are about 146 million views of content related to Coca-Cola. However, only 26 million views were of content that we created. The other 120 million views were of content created by others. We can’t match the volume of our consumers’ creative output, but we can spark it with the right type of content.

Tripodi offers great insights into how Coca-Cola has encouraged user content and engagement in social media campaigns (one of which is an anachronistic Twitter account for Doc Pemberton, the inventor of Coke’s secret formula). If a connection with readers is what publishers need to survive and to thrive, both Coca-Cola and Valve should provide inspiration for going beyond “just marketing.”

But, in both cases, the primary holders of the brand or IP, respectively, gave up a certain amount of control to allow consumers or other video game companies to create or collaborate, making those connections a productive way to market. Can the book industry do the same?

Tweet of the Week

That’s just a taste of what you may have missed this week. To stay on top of the most interesting news, commentary and tweets related to publishing, keep in touch via our RSS feed, follow us on Twitter, join your publishing colleagues in our LinkedIn group, and connect with the broader DBW Network.